Important Notice: Haselkorn & Thibaut is currently investigating David Lerner Associates’ sales of Energy 11 and Energy 12 investments and actively helping investors recover their losses from these unsuitable energy investments.
The energy sector has long been a cornerstone of investment portfolios, offering both opportunities for substantial returns and significant risks. Among the various energy investments that have emerged in recent years, Energy 11, LP stands out as a notable case study that provides crucial insights into the complexities of limited partnerships and their implications for investors and the broader market.
Energy 11, LP was formed to acquire and develop oil and gas assets, with a focus on fields such as the Bakken and Sanish in North Dakota. In October 2019, the partnership completed its offering and began acquiring assets, marking a significant milestone in its operational timeline.
Introduction to Energy Resources
Table of Contents
Energy 11, LP represents a limited partnership specifically structured to develop oil and gas opportunities across multiple energy sectors in the United States. The partnership’s primary strategy focuses on acquiring non operated working interests in producing wells while identifying promising future development locations, with particular emphasis on North Dakota’s lucrative energy landscape.
This America Energy Fund has successfully raised significant gross proceeds, which have been strategically deployed to invest in the prolific Bakken shale formation and its close geologic cousin, the Three Forks shale. These investments are concentrated within the Greater Williston Basin, a region that represents one of the largest oil fields in North America and has become synonymous with America’s energy renaissance.
Central to Energy 11’s distribution strategy was its relationship with David Lerner Associates, a prominent broker dealer that took on the responsibility of marketing units to customers. David Lerner Associates and its representatives would recommend Energy 11 investments to their customers. This brokerage firm arrangement allowed David Lerner Associates to earn substantial commissions and contingent incentive fees based on the volume of units sold, creating a financial incentive structure tied directly to industry activity and sales performance.
Energy 11’s operational focus centers on generating attractive returns for limited partners through strategic positioning in America’s most productive energy regions. The partnership’s activities are primarily concentrated in the Sanish Field, located in Mountrail County, North Dakota, where the organization has made substantial commitments to enhancing the value of its interests through strategic development and operational excellence.
The partnership holds significant stakes in Bakken Assets throughout North Dakota, positioning investors to benefit from one of America’s most prolific energy developments. With interests spanning multiple producing wells and future development locations, Energy 11 represents a substantial commitment to America’s domestic energy production capabilities.
Current Problems with Energy 11
Energy 11 has faced significant operational and financial challenges that have severely impacted investor returns. Most notably, the partnership has struggled with dividend payment issues, leaving many limited partners without the regular income distributions they were promised when they initially invested.
This lack of dividend payment has created substantial financial hardship for investors who relied on these distributions for income, particularly retirees and other customers who were seeking steady cash flow from their energy investments. Energy 11 was not suitable for many investors, especially those with conservative investment goals or a low risk tolerance.
The problems with Energy 11 extend beyond missed dividend payments to broader performance issues that have called into question the partnership’s viability. Despite its substantial interests in the prolific Bakken shale formation and Three Forks developments, the partnership has failed to deliver the attractive returns that were projected to limited partners. These performance shortfalls have been compounded by broader challenges in the energy sectors, including volatile oil prices, increased regulatory pressures, and operational difficulties in maintaining profitable production from its Bakken Assets.
Industry activity in North Dakota’s energy markets has also presented unexpected challenges for Energy 11’s future development locations.
What was initially marketed as a straightforward opportunity to acquire non operated working interests in America’s largest oil fields has proven to be far more complex and risky than many customers were led to believe when they purchased units through David Lerner Associates. The suitability of these investments should have been subject to careful assessment by the brokerage firm to ensure they were appropriate for each investor.
Introduction to Loss Recovery
Investors who have experienced losses in Energy 11, LP and Energy Resources 12, LP may have viable options for recovering their investments. These limited partnerships were designed to develop oil and gas properties, with a particular focus on the prolific Bakken shale formation in North Dakota—one of the most dynamic energy sectors in the United States.
Sold exclusively through the broker dealer David Lerner Associates, these offerings were marketed as opportunities to participate in America’s energy boom. However, the brokerage firm and its registered representatives received substantial commissions, including a 6% upfront commission and up to 4% of gross proceeds from units sold as contingent incentive fees, creating strong financial incentives to promote these products.
Unfortunately, many investors—including retirees, retail customers, and those with limited experience in energy resources—were allegedly steered into these high-risk, illiquid limited partnerships without a full understanding of the risks involved. The energy sectors, especially those tied to the Bakken shale, are known for their volatility and unpredictability, making them unsuitable for many investors seeking stable returns.
If you have suffered significant losses in Energy 11 or Energy Resources 12, you may be eligible to recover your losses. A free consultation with a reputable law firm can help you determine your rights and the best course of action to pursue recovery from the brokerage firm or broker responsible for your investment.
Implications for Future Development Locations
The trajectory of Energy 11 and similar limited partnerships within energy resources has become increasingly uncertain in recent years. This uncertainty stems not only from the partnership’s operational problems and lack of dividend payment but also from mounting allegations of unsuitability and misrepresentation in how these investments were marketed to customers by broker representatives. These allegations have highlighted critical gaps in the investment process and underscore the fundamental responsibility of any brokerage firm to ensure that their recommendations align with investors’ financial situations and risk tolerance.
The legal landscape surrounding Energy 11 has become particularly complex, as numerous investors who have suffered significant losses due to what they claim were unsuitable energy investments have begun filing securities arbitration claims.
Many of these investors have chosen to file claims directly against the brokerage firm, David Lerner Associates, alleging misconduct, misrepresentation, and unsuitable recommendations related to complex investment products. These claims specifically target David Lerner Associates and its individual broker representatives, seeking to recover damages related to alleged misrepresentations and unsuitable recommendations made to customers seeking energy sector exposure.
From an operational standpoint, Energy 11 maintains substantial interests within America’s energy infrastructure. The partnership currently holds approximately 24% combined working interests in 312 producing wells, with these Bakken Assets predominantly focused on the valuable Three Forks and Bakken formations throughout North Dakota. This significant stake represents both the partnership’s potential for attractive returns and the scale of investor exposure to volatile energy markets.
The performance and legal challenges surrounding Energy 11 carry implications that extend far beyond individual customer losses. The case has sparked broader discussions about the role of broker dealer firms in promoting energy resources, the adequacy of due diligence processes when customers seek to acquire energy interests, and the need for enhanced regulatory oversight in the alternative investment space.
The Energy 11 situation also highlights the critical importance of proper investment suitability assessments when a brokerage firm recommends energy sectors to customers. The allegations suggest that many investors were not adequately informed about the risks associated with limited partnerships focused on energy resources or that these investments were inappropriate given their individual financial circumstances.
For the broader energy industry, the Energy 11 case serves as a cautionary tale about industry activity and the intersection of investment promotion and fiduciary responsibility. The situation demonstrates how marketing practices and contingent incentive fee structures can potentially create conflicts of interest when a broker dealer promotes energy investments to customers seeking to acquire interests in America’s energy development.
These lessons are likely to influence future regulatory approaches and industry best practices in how brokerage firms market energy resources and limited partnerships to investors, particularly regarding future development locations and non operated working interests in America’s energy sectors.
Recovery Process and Options
Recovering losses from investments in Energy 11 and Energy Resources 12 typically involves filing a FINRA arbitration claim against David Lerner Associates. This process is best navigated with the support of experienced securities arbitration attorneys who understand the intricacies of energy investments, including non operated working interests, future development locations, and the unique risks associated with the energy sectors. Investors may be entitled to compensation if they can demonstrate that the brokerage firm or its brokers engaged in misrepresentations, omissions, or made unsuitable recommendations regarding these limited partnerships.
The Spirit of America Energy Fund (SOAEX) is another example of an energy investment product that has faced similar unsuitability claims, underscoring the importance of proper due diligence and suitability assessments. Investors in Energy 11 or Energy Resources 12, both of which are focused on onshore oil and gas development in the United States, may be able to generate attractive returns through a successful arbitration claim if they can establish that their interests were not properly protected.
To begin the recovery process, investors should reach out to a qualified law firm by phone or email to schedule a free consultation. By clicking the message contact link, you can take the first step toward understanding your rights as a limited partner and exploring your options for recovering losses from these investments. The process is designed to help limited partners and other investors hold brokerage firms accountable for unsuitable recommendations and to restore value lost in high-risk energy investments. Don’t hesitate to seek the guidance you need—your financial future may depend on timely action.
Protecting Your Non Operated Working Interests
If you are among the investors who have experienced losses in Energy 11 or similar energy resources, it’s crucial to understand that you may have legal recourse available. The securities laws provide important protections for customers who have been sold unsuitable investments or who have been victims of misrepresentation by their broker or brokerage firm.
Take Action Today – Your Rights Matter
At Haselkorn & Thibaut, we understand the complex challenges facing Energy 11 investors and are committed to helping customers recover their losses from unsuitable energy investments. Our experienced securities attorneys specialize in investment fraud cases involving energy resources and have a proven track record of success in arbitration proceedings against major brokerage firms like David Lerner Associates.
We offer:
- Free consultation to evaluate your Energy 11 losses
- Comprehensive analysis of your energy investments and interests
- Expert guidance through the securities arbitration process against your broker dealer
- No upfront fees – we only get paid when you recover compensation
- Specialized experience with limited partnerships and energy sectors
Don’t let unsuitable investment recommendations in energy resources cost you your financial security. Whether your broker recommended Energy 11, other America Energy Fund investments, or similar limited partnerships focused on Bakken Assets and Three Forks developments, the securities arbitration process has time limitations.
Message Contact Haselkorn & Thibaut today:
- Get a free consultation — click the link to get more information or to start the process.
- Call for your free consultation with our experienced firm
- Let our team fight for the compensation you deserve from your broker dealer
Your financial future is too important to leave to chance. Take the first step toward recovery by contacting our experienced securities fraud attorneys today. We understand the complexities of energy investments, from non operated working interests to future development locations, and we’re here to help customers who have been harmed by unsuitable recommendations from their brokerage firm.
